Legal Articles

Ideas Fuel Industries

Impactful Wage Litigation for Washington Farmers

March 10, 2017

Overview

Initiative No. 1433

Washington farmers are in court over the payment of wages and the implications of Washington’s Initiative Measure No. 1433, which increases the minimum wage and requires employers to provide paid sick leave. While the litigation is proceeding on two different tracks, the outcomes of both may have a significant impact on the agricultural business of the state.

Washington’s agricultural industry, represented by individual farmers and the Washington Farm Bureau, has joined forces with the National Federation of Independent Business, Washington Retail Association, and the Northwest Food Processors Association to challenge Initiative No. 1433, which was approved by voters in November 2016. Their lawsuit would enjoin the enforcement of Initiative 1433 by the State of Washington. The suit was filed in February 2017 in Kittitas County, Washington.

Initiative No. 1433 provides an increase of the state’s minimum wage and requires employers to provide paid sick leave. Prior to the election, opponents of this initiative challenged the idea that raising the minimum wage and requiring paid sick leave will benefit all employees across the state economy by providing individuals with more disposable income. They argued that many industries, small businesses and communities could not absorb such a significant increase of costs, and that their costs would be passed along to the consumer—typically the very people proponents argued would benefit.

Now Initiative No. 1433 faces a constitutional challenge, which, if successful, will permanently enjoin its enforcement. Article II of Washington’s Constitution precludes bills from raising more than one subject. The initiative raised two subjects: (1) wage increases and (2) the implementation of statewide mandatory employer-paid sick leave. A permanent injunction would mean that proponents of the initiative would have to return to the voters.

If the suit is successful, proponents of the measure may “fix” the problem by introducing two separate initiatives in November 2017. Thus, the Kittitas action will delay but is not likely to ultimately avoid an increase in minimum wage and some employer-paid sick leave. It is likely that Washington employers will be required to provide these employee benefits in the future—following behind other Western states that have seen the same changes.

Getting Ahead: With this change coming sometime soon, employers should consider a business strategy to increase their workers’ wages and benefits, including implementing some form of paid sick leave.

Class Action Challenges to Piece-Rate Work

Washington farmers are facing class action lawsuits for not paying rest breaks for piece-rate workers. These lawsuits, known as “Sakuma” lawsuits, are purportedly based on the Washington Supreme Court’s decision in Demetrio v. Sakuma Bros. Farms, Inc. The Sakuma case was decided in July 2015, and held that agricultural employees in Washington who are paid on a piece-rate basis must receive pay for any rest breaks that they are entitled to separately, and in addition to, the piece rate.

The recent wave of “Sakuma” lawsuits against Washington farmers claims that the requirement to pay rest periods separately from the piece rate applies retroactively—in other words, prior to the Sakuma decision in July of 2015. This claim has yet to be evaluated by the Washington Supreme Court. Until that occurs, we can expect to see a growing number of claims against Washington farmers.

Avoiding Litigation: One way Washington farmers may mitigate the risk of being a target of a “Sakuma” lawsuit is to voluntarily pay rest periods separately from the piece rate on a retroactive basis and seek a release of claims from their employees.